On May 24, 2012, the U.S. Supreme Court decided Freeman v. Quicken Loans, Inc., No. 10-1042, holding that 12 U.S.C. § 2607(b), a portion of the Real Estate Settlement Procedures Act ("RESPA"), unambiguously requires that a complaining party must show that a charge for real estate settlement services was divided between two or more persons. One person's retention of an unearned fee does not violate the Act.
Three married couples obtained mortgage loans from Quicken Loans, Inc. In 2008, they filed separate actions in Louisiana state court alleging that Quicken Loans had violated § 2607(b) by charging them fees for which no service had been provided. Quicken Loans removed the suits to federal court, where they were consolidated. Quicken Loans moved for summary judgment on the ground that § 2607(b) applies only if unearned fees are split with another person. The District Court agreed and granted summary judgment in favor of Quicken Loans. A divided panel of the Fifth Circuit affirmed.
Granting certiorari, the U.S. Supreme Court affirmed the Fifth Circuit. The Supreme Court considered the plain language of § 2607(b), which provides that "[n]o person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service ... other than for services actually performed." The Court determined that "[b]y providing that no person 'shall give' or 'shall accept' a 'portion, split, or percentage' of a 'charge' that has been 'made or received,' 'other than for services actually performed,' § 2607(b) clearly describes two distinct exchanges." The Court's conclusion was bolstered by references to Congress's use of tense, the remedial scheme for violations of the statute, the canon of construction providing that "a word is given more precise content by the neighboring words with which it is associated," and the dictionary definitions of the words used. The Court declined to give deference under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), to a 2001 policy statement issued by the Department of Housing and Urban Development, the agency that until recently was authorized by Congress to interpret RESPA, on the ground that that the agency interpretation "goes beyond the meaning that the statute can bear." The Court also concluded that its interpretation of the prohibition against kickbacks in § 2607(a) did not render the provision surplusage because subsections (a) and (b) each reached different conduct. Finally, the Court noted that Congress may well have intended that existing remedies, like state-law actions for fraud, were sufficient to address entirely fictitious fees.
Justice Scalia delivered the opinion for a unanimous Court.